AUD/FJD Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver for further movement.
Key drivers:
- Rate gap: The Reserve Bank of Australia is signaling possible interest rate hikes, while the Reserve Bank of Fiji maintains a stable policy amidst moderate economic growth forecasts.
- Risk/commodities: Declining commodity prices are pressuring the Australian dollar, as lower demand for key exports could impact its value against the Fijian dollar.
- One macro factor: China's weak manufacturing activity could further weigh on the AUD, potentially affecting trade dynamics with Australia’s largest trading partner.
Range: The AUD/FJD is likely to drift within this stable range, as recent fluctuations indicate limited volatility.
What could change it:
- Upside risk: A surprise interest rate hike from the Reserve Bank of Australia could strengthen the AUD.
- Downside risk: A sudden shift in global economic conditions or a deeper slump in commodity prices may weaken the AUD against the FJD.
